Excess Reserves Make a Bank Less Vulnerable to Runs, but Bankers

question 125

Multiple Choice

Excess reserves make a bank less vulnerable to runs, but bankers do not like to hold excess reserves because holding excess reserves

• A)are disliked by depositors.
• B)means lower profits for banks.
• C)are discouraged by government regulators.
• D)All of the above are correct.

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Definitions:

Vasopressin

A hormone that regulates water retention in the body and increases blood pressure, playing a key role in homeostasis.

Endorphins

Natural, pain-relieving chemicals produced by the body during activities like exercise, eating, and laughter, often contributing to a sense of well-being.

Chronic Pain

Persistent pain that lasts for months or even years, often significantly affecting a person's quality of life and ability to perform daily tasks.

Circadian Rhythm

The natural, internal process that regulates the sleep-wake cycle and repeats roughly every 24 hours.